Big investment money jacks up home prices in portions of Socal

We're talking about the Inland Empire and other areas that bore the brunt of the real estate collapse. As in more affluent communities, prices in Riverside and San Bernardino have skyrocketed, but for somewhat different reasons. Turns out that institutional investors like L.A.-based Colony Capital have been snapping up thousands of properties to rent out and later sell off at a profit. This has helped increase overall prices: In April, the median price for the lowest-cost third of the region's housing stock jumped 20.7 percent year-over-year. That's considerably higher than the other two thirds. In some cases, higher prices have squeezed out ordinary buyers. By the way, none of this should come as a huge surprise - Colony, Blackstone, and other big Wall Street players had established funds a few years back to acquire beaten up real estate. From DealBook:

Joe Cusumano, a real estate agent in Riverside County, Calif., said that in recent months 90 percent of his business had been for companies like Invitation Homes, a Blackstone subsidiary. Home values in Riverside County have risen by 15 percent in the last year, according to CoreLogic. But Mr. Cusumano said he wondered if faraway investors would properly maintain the homes they buy. He said that Invitation Homes had been willing to put money into the properties, but he was not so sure about the other players. He also worries what will happen when these investors start selling, as they inevitably will. "The thing that scares me is the values going up so quickly," said Mr. Cusumano. "That's what happened before and that's what's scaring me. Is this going to happen again?" The idea of investors' buying homes and renting them out is nothing new. But in the past, landlords were almost always local. Now big investors are using agents like Mr. Cusumano to stake a claim to entire neighborhoods.